Interlocken vacancy rate at ‘6 or 7 percent’

BROOMFIELD — While a sharp chill froze some Colorado real estate markets this summer, deals heated up for the Interlocken Advanced Technology Environment. The office park in Broomfield saw a significant drop in vacancies over the past several months that has commercial agents, developers and city planners excited about future prospects.

“It’s been interesting,” said Garrett Baum, a Colorado developer and managing partner of Urban Frontier LLC. “About eight months ago, it seemed like activity was picking up. We waited to see if that was really happening, and in the last five or six months, there are deals getting done and signed, and we have companies looking to buy land or lease buildings.” Baum formerly managed Interlocken and currently serves on the board.

The 900-plus-acre site boasts high-end office space, conference centers, hotel accommodations, a golf course and other amenities, all with easy access to Boulder and Denver. The top-end facilities draw clientele even in a flat economy, said commercial agent Frank Kelley, senior vice president with CB Richard Ellis.

“There is a flight to quality in every market,” Kelley said. “It’s consistent with what we’ve seen in the past as people want the nicest building they can occupy,” he said.

In a stagnant economy, finding a good deal on a high-end space is more likely. Vacancy rates for class A properties at Interlocken dropped to 6 percent or 7 percent this quarter, Kelley said. It was nearly double that in 2009.

“Last year, people were tentative because they didn’t know how things would turn out with the economy,” Kelley said, causing many companies to throttle down spending. “When the economy didn’t go down the tubes … there was a lot of pent-up demand.”

In the second quarter of 2010, the metro region absorbed 475,000 square feet of office space, Kelley said, a total that doesn’t reach pre-2008 levels, but a clear increase from the past few years. Additionally, a new Interlocken building currently under construction is set to complete next month, with 50 percent of the space already leased.

It’s not just the quality office space attracting businesses, though, Baum said. The area also appeals to some key industries either not hard hit by the recession or recovering more quickly.

“Green technology is taking off, and there is a lot of brain trust in that area, and the venture-capital money is following,” Baum said. That draw applies to much of the region near Interlocken, he said.

“The whole northwest market is seeing good velocity and good activity,” Baum said, and reeling in technology, renewable energy and biotechnology companies.

Companies such as the Internet security firm Webroot Software Inc. in Boulder plan to move to Interlocken by year’s end.

“Our new space at 385 Interlocken is brand-new, class AA office space that not only accommodates our current Colorado employee base but gives us room to grow in a modern facility,” said MacLean Guthrie, director of public relations for Webroot.

Webroot currently occupies 66,000 square feet of office space in Boulder, which it is rapidly outgrowing, MacLean said. Webroot leased 100,000 square feet in the Interlocken facility and plans to move all 250 Colorado-based employees to the new site in December. The quality of the facility, linked with location and room for expansion, drove the decision to move to Interlocken.

For Wyoming-based coal-mining company Cloud Peak Energy, leasing space at Interlocken made sense because of its proximity to Denver International Airport.

“It’s to give our CEO, CFO, investor relations and other people more accessibility to investment bankers who want to come in and speak with our company,” said Heidi Lowe, community relations and public affairs manager for Cloud Peak Energy.

They signed a 10-year lease for the Interlocken space and plan to move 50 people there sometime in August. Company headquarters will remain in Gillette, Wyoming, but with no international airport nearby, travel for international investors was a hassle.

“It’s also closer to our mines … we can get there quicker,” Lowe said. Cloud Peak has several mining operations, including in the Powder River Basin located in southeast Montana and northeast Wyoming.

Vail Resorts Inc. (NYSE: MTN) — headquartered at Interlocken since 2006 — leased additional Interlocken office space earlier this year to join 100 accounting employees from their Keystone offices with the existing Interlocken-based accounting operations.

“We wanted our accounting department to be able to work efficiently and effectively together, so we moved them down here,” said Kelly Ladyga, spokeswoman for Vail Resorts. The company now houses 400 employees at the Interlocken site, she said.

Housing options at a variety of price points, easy access to Boulder, Denver and the mountains, as well as the proximity to DIA for traveling executives, prompted the Vail Resorts move from Avon, Colorado, to Interlocken in 2006, Ladyga said.

The technology company Sybase Inc. also plans to move its Boulder offices to Interlocken later this year, Kelley said. Sybase officials declined to comment on reasons for the move.

The trend toward Interlocken doesn’t surprise Kevin Standbridge, manager of the city and county of Broomfield.

“We think it’s a fantastic thing,” Standbridge said. “This is what we’ve been working with our economic-development council to achieve,” he said. Broomfield offered “modest” incentives to businesses in the form of tax breaks, Standbridge said, but also points to the U.S. Highway 36 corridor location with easy access to Denver, Boulder and DIA as a magnet for companies.

“I think this has been the story of Interlocken for quite awhile,” Standbridge said. “It’s very well managed and very well planned, and it’s where a group can go for new, class A office space in the corridor.”

on Facebook on LinkedIn